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Partners, Care New England Move Ahead with Hospital Merger Deal

Partners HealthCare and Care New England forged ahead with the hospital merger process despite opposition from healthcare stakeholders in Rhode Island.

Hospital merger

Source: Thinkstock

By Jacqueline LaPointe

- Partners HealthCare of Massachusetts recently announced that it has signed a definitive hospital merger agreement to add Rhode Island-based Care New England Health System to its hospital system.

The health systems signed a letter of intent to merge back in April 2017. The new definitive agreement marks the end of a 10-month due diligence process, which has resulted in a plan to help Care New England improve its financial standing, Partners reported.

Local news sources previously reported that Care New England’s recent financial losses may have spurred a delay in negotiations. The health system incurred a $47 million loss on operations in the fiscal year ending in September 2017. Care New England had already lost $68 million the previous year.

“Our lengthy discussions and due diligence with CNE have strengthened our relationship and further solidified our interest in building on the successful clinical collaboration we have already developed together,” stated David Torchiana, MD, Partners HealthCare President and CEO.

“We are also aware of and deeply respectful of the other components of the Rhode Island health care landscape and hope to find common ground and mutually beneficial pathways to improve the academic strength of the hospital programs and maximize the benefit to the Rhode Island economy,” he continued.

Partners HealthCare and Care New England will now move forward with a formal plan to merge their systems.

The agreement includes plans to add Kent Hospital in Warwick, Women & Infants Hospital of Rhode Island in Providence, the VNA of Care New England in Warwick, Butler Hospital in Providence, and the Providence Center in several Rhode Island locations under the Partners HealthCare umbrella.

Notably, the announcement failed to mention the inclusion of Care New England’s Memorial Hospital, which has experienced severe financial setbacks. The hospital's operations lost $91 million since Care New England acquired the facility in 2013, local news sources reported.

After a deal to sell the hospital fell through, Care New England recently closed the hospital’s emergency department, which functionally closes the hospital, WPRI reported.

In addition, the hospital merger deal should continue to foster the educational and research relationship between Care New England and Brown University, Partners stated.

However, Brown University President Christina Paxson recently opposed the proposed hospital merger deal.

In a letter to the Brown community, Paxson explained that she felt the potential hospital merger between Care New England and Partners HealthCare would be detrimental to Rhode Island’s healthcare market.

“Doing so is likely to lead to specialty healthcare shifting to Massachusetts, impeding access to healthcare for Rhode Islanders and especially for members of the state’s underserved communities,” she wrote. “It also would likely increase the cost of care and reduce the ability of Rhode Islanders — consumers, businesses, healthcare workers and policy-makers — to have a voice in how our healthcare system works.”

Paxson offered an alternative merger deal in the letter. She announced that Brown University and Prospect Medical Holdings, which owns CharterCARE Health Partners, are open to discussing a hospital merger deal with Care New England.

“Brown believes that this plan, which would place one or two key academic hospitals under Brown’s care, positions us to create the healthcare system that Rhode Island deserves,” she wrote. “This integrated system would deepen collaboration with other Rhode Island health care providers, insurers and public officials to deliver affordable, high-quality healthcare.”

In response, Care New England spokesperson Jim Beardsworth stated that the proposed alternative “represents their intention to acquire and split up the Care New England Health System — a process undertaken of their own independent action and interests,” reported WPRI.

Care New England plans to move forward with a hospital merger deal with Partners HealthCare. The health systems hope to create and execute the definitive agreement as soon as possible, the health systems stated.

But the Brown University and Prospect Medical Holdings deal is still on the table if state approvals fall through or Partners HealthCare decides to back out, Paxson stated.

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